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Nick: Congrats everyone that placed their bets on Marvell recently, things are looking good for the next two years or so for the AI market, at least from these very, very early indications. Kasey: Hey, everybody. Welcome back to Chip Stock Investor. It's Friday. Congratulations. You've made it through the week.
To wrap up earning season, we're going to be having a live Q& A session next week, Tuesday, March 12th, 11 a. m. Pacific, 2 p. m. Eastern for our Discord users. Nick: You can get access to that here on YouTube via a subscription or over on the Ko fi shop. Five bucks a month. It's nothing. Thanks In addition to that's where we drop all of our show notes and manuals too.
So that's where you can get the actual perks of being a member if that's what you want. If you want to continue getting subscription to death, we've got an option for that. Or of course, over on the Kofi shop, you can get access to stuff on an a la carte basis, whichever you prefer. Kasey: As we finish with our earnings season, we are going to move on to more fun stuff, not earnings.
More deep dives, we're going to cover some new companies, so make sure you're subscribed to the channel to get all that new content and we'll dive right in now to Broadcom and Marvell. Broadcom just reported their Q1 fiscal 2024 numbers. Revenue $11. 96 billion, up 34 percent over last year. Nick: GAAP earnings per share $2.
84, down 67. 7 percent from last year, but on an adjusted basis, it was nearly $11 up 6 percent year over year. Free cashflow, $4. 7 billion up 19. 6 percent from $3. 93 billion last year. Yeah. Just the EBITDA margin of 60 percent for the year. EBITDA of course, earnings before interest tax depreciation and amortization as the late great Charlie Munger used to say, these are BS earnings.
I guess you could look at it that way. It does provide a little extra insight into the actual operation, but just a note, that's what we're looking at. The company, highly profitable, and especially as they try to unlock the VM ware profitability to get it in line with the rest of the legacy Broadcom business.
But maybe just a little pro tip here, you probably have noticed at this point that we like to use a blend of GAAP earnings per share and free cashflow, which is a non GAAP metric. And generally speaking, it depends company to company, but generally speaking, a blend of those two things is just simply non GAAP earnings per share.
So if you're looking for a shortcut, if you try to blend those two metrics together, adjusted GAAP earnings per share, kind of gets you into the ballpark. At any rate, Kasey, let's talk about the specific segments, a lot going on for Broadcom this quarter. Kasey: Yeah, absolutely. When you look at their networking, which includes the AI and computing offload portion of the business, it's up 46 percent year over year to $3.
3 billion. Wireless storage connectivity, broadband, industrial were all down as expected. In total, semiconductor sales $7. 4 billion for Q1 fiscal 2024. Slight increase sequentially from Q4 2023 and 4% increase year over year. Regarding infrastructure software, they saw an 156% increase because of that VMware acquisition, $2.1 billion of the $4.6 in total was from VMware.
Nick: So grand total, not much has changed for Broadcom's full year outlook. They're still looking at about a mid to high single digit percentage increase for semiconductor sales and as you'll notice Broadcom, same with baby Broadcom as we like to affectionately refer to Marvell, you're getting that networking business with the massive AI networking compute segment within that, offsetting a lot of weakness in wireless carrier, the storage connectivity, broadband, and so on.
But the added layer here now that it really makes Broadcom stand out from the rest of the pack is that infrastructure software. Slower but steady growth. But highly profitable. This is going to be a big accretive benefit for Broadcom going forward as they fully integrate VMware and get that debt paid off.
That was a big acquisition. included in that, of course, is the recent announcement that Broadcom was selling the VMware EUC, the endpoint compute segment of VMware to KKR for $4 billion. Carbon black, the endpoint security business that VMware purchased a number of years ago, also probably still going to get sold at some point to help with working down the total net debt on the business.
Final takeaway though, here, Kasey, this is a big giant business, not going to be the highest growth name out there, even with the big AI business, but still growing, still definitely a growth name. The thing to really focus on though, is those profit margins. If CEO Hock Tan and company can continue to unlock those higher profit margins, which was the whole rationale for acquiring VMware in the first place.
Good stuff. Kasey: Let's now shift our focus over to Marvell. The financial numbers for Q4 fiscal 2024 for Marvell, high level numbers. Revenue of $1. 43 billion, a 0. 7 Percent increase over last year. GAAP earnings per share in the red, negative 45 cents per share versus 2 cents per share at last year.
Non GAAP earnings per share stayed flat at .46 cents free cashflow increased 58. 4 percent to $465 million. Nick: Okay. let's delve into the semiconductor business here. Again, the big differentiator between Broadcom on Marvell, besides size, of course, Broadcom, massive business. A lot of overlap in the semiconductor lines, though, but Marvell does not have that software business that Broadcom does, but let's talk about the overlap because there is quite a bit.
Data center, again, that's where most of the AI networking chips are going. Big, 54 percent increase to $765 million in the quarter. Much better than what was anticipated. The only problem is everything else was worse than anticipated. The enterprise, non data center and non cloud business down 34 percent year over year.
Mobile carriers that includes the 5g network business down 38 percent. Consumer markets, they continue to cashflow that they're bringing some final product lines to the end of their life and not renewing investments into that segment, so down 21 percent. And it's going to be a 70 percent year over year decrease in the next quarter.
Even automotive and industrial, a bit of a lumpier business, down 17 percent year over year. In total, the enterprise and mobile carrier business, we said last quarter when we did the update, probably going to be in decline for the next couple of quarters. And Marvell basically reiterated that. Yes, through the first half of this year, things are going to continue to get worse in enterprise and mobile carrier business lines, mostly offsetting the progress in the data center and AI business.
So the good news is, at the end of this quarter, Marvell's AI revenue went from about one third of total sales last year to half of sales exiting this fiscal year. That's the good news. AI now very much in the driver's seat as the primary growth lever for Marvell. But you've got all these business lines more than offsetting that progress.
We recently did a video on the cloud ASIC market. And how that pertains to NVIDIA, there was a report that NVIDIA was entering the ASIC market, and it's been noted that Broadcom's big Cloud compute ASIC customer is Alphabet or Google, housed within Broadcom's networking revenue segment. And Marvell has stated in the past that its strategic ASIC customer is Amazon AWS.
You can see our coverage of this ASIC market right here. After looking at these numbers for Marvell Technology, it looks pretty dismal, right? It was not a great quarter. So why is the stock holding up so well for Marvell? Yeah, it is holding up well. If you look at the stock price run up in the last three to six months, and then this outlook, which again, as we said, this was always to be expected through the first half of this year.
The non cloud, enterprise business and the 5g mobile carrier business are in all out pullback mode. And that was going to probably more than offset the benefit from AI chips. That's exactly what happened. And so frankly, when we make a decision on what stocks we're currently buying right now, we've owned Marvell for years, long before it was like this, top AI stock, that entered the collective investor consciousness.
We haven't been adding because we kind of like to do like a probability of what the business is going to do. And the higher probability in our estimation was, the stock still has a while to go before, the business starts posting some positive returns and the stock price follows suit. The lower probability outcome was the thing rockets higher and stays higher, on long term AI optimism.
Given this current outlook, the stock really should have gotten blasted because as you said, Kasey, the outlook is not great for the first half of this year. Again, much the same as what we saw all last year, because all of that legacy cloud and enterprise business in particular getting absolutely hammered, as companies switch all of their spending over to AI.
And Marvell is just not as well diversified as Broadcom. Everyone who was making the bet on the smaller probability outcome really got a huge, huge benefit, a bailout, you could say, from Marvell's board of directors, which issued the largest ever stock repurchase authorization of 3 billion. I think that as a pretty clear indication, CEO, Matt Murphy also said they have a high level of visibility into their AI business over the next two years.
Big hint that it's looking very good for them. So they must see not just growth in the next two years, but very profitable growth to issue that large buyback. And that's probably exactly why they announced it when they did, because they know the next six months are going to be pretty ugly, but, longer term, they think they're in pretty good shape, so time to start repurchasing the stock.
Congrats everyone that placed their bets on Marvell recently, things are looking good for the next two years or so for the AI market, at least from these very, very early indications. But, the next six months are without a doubt going to be pretty ugly looking on the financial front. Kasey: Let's talk a little bit more about Broadcom, the bigger and more well entrenched, slower but steadier growth and income play.
Is Broadcom a timely buy right now? Nick: Given that it's a slower and steadier business. It trades for about 32 times trailing 12 month free cashflow, as of pre market March 8th, 2024. Share price, roughly 1, 370 bucks per share. It's still a bit frothy. But that's been the case for a while now, we don't think it's the timeliest buy, but again, this is one that we've owned for many years.
So that has a lot to do with why we're not buying at this point. It's not an egregious price, but for what will be a slower, but steadier business over time, it's definitely an elevated premium. Kasey: Let's shift to Marvell because that's another company that we have owned for quite some time now, but it's definitely been an more aggressive growth stock.
Nick: Yeah, for sure. And you can see that again in the earnings numbers in the chart that you put together. No GAAP profitability still. A lot of that has to do with the acquisition spree that took place a few years ago that Matt Murphy and company undertook to kind of get Marvell more diversified and positioned for this AI data center boom that we're now just, hopefully in the early innings of for Marvell, but kind of similar though, it is the all out growth stock, but it's 65 times trailing 12 month free cashflow.
Value investors aren't going to be happy with that. This one is looking a bit more frothy, at this point, but again, I think the reason why the stock is holding up so well is because of that announced share repurchase plan of $3 billion. I think a bullish signal from Marvell that they like where they're at for the next 2 years, at least.
Again, we already own it, so that's the primary reason why we're not really interested in adding ourselves at this point. I don't know if that's helpful in answering the question or not, but that's where we sit. So that's a wrap on our earning season. It was busy. We know that we didn't get to every single company and we apologize, but we're going to continue to try to get more deep dives and give, you viewers, plenty of value for your time, which is of course, the most important thing.
Getting video content out on a regular basis is a bit harder than just typing things vigorously into a chat.. So that's why the Discord channel now exists. We have a lot more information on all the stocks that we cover and or own over there and of course, the benefit of that you can hit us and the community that's in the process of getting built, questions about whatever everyone's looking at on the semiconductor cyber security and greater tech digital economy.
Once again, thank you so much for watching this video. Make sure you hit the subscribe button if you have not already. We really appreciate your subscriptions here on YouTube. And if you want access to that Discord channel, please join the membership here on YouTube or over on our Ko fi page. Link is in the description below.
Everyone have a great rest of your day and we will see you again soon at Chip Stock Investor.
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